Holiday shopping can be stressful, especially when you run out of money. The first step to solving a budget crisis is changing your plan. This could mean buying fewer gifts or returning things you already bought. Either way, spending within your means involves tough decisions. You may really want to give a particular gift, but not at the price of your finances. Still, if you need a quick cash infusion, here are some options. Each has its own pros and cons, so keep in mind you always have an out — don’t buy more gifts than you can afford!
1. Credit Cards
A credit card is the easiest option since you likely already have one. But going into debt for gifts isn’t the best idea. Some cards carry high interest rates, so if you plan on whipping out your credit cards, try to use one with a low APR. (You can see if you’re carrying one of the best low-APR credit cards here.) You can find out the interest rates on your current cards by checking account info. online or calling the number on the back of your card.
Depending on your credit, you might qualify for a new credit card, perhaps even one with an interest-free financing period. Just make sure to pay off the balance, otherwise you’ll be stuck paying interest. You can see where your credit scores stand for free on Credit.com before you apply so you don’t apply for cards you’re unlikely to qualify for.
2. Payment Plans
Some online and physical retailers offer installment plans for purchases, which makes them affordable in the short term. PayPal Credit is one such product for online purchases. For someone without a credit card, this can be an alternative, but make sure to read the terms, like the payback period and interest rate, before you sign on.
3. Personal Loans
Personal loans generally have lower interest rates than credit cards, though the approval process will likely take too long to be able to get you a cash infusion before Christmas Day. These loans can actually help you build credit if you don’t have any installment loans on your credit reports right now. (Here’s a quick explainer on installment loans vs. revolving accounts.)
There are also short-term loans you can take out from banks, credit unions or payday lenders, although the latter can be hard to pay off and keep you trapped in a cycle of debt. Opening these accounts may mean you’re not taking the time to research better options.
How you choose to spend money is your business, but consider the long-term consequences. Taking on debt can affect your credit for months or years to come.
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